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The recent unveiling of a new Chinese passport that contains a map marking territory disputed with India has emerged as a renewed source of tension between the two countries (Sina.com, November 25; Indian Express, November 24). While the passport issue is unlikely to be a lasting source of tension, the underlying source of frictionthe Sino-Indian territorial disputeremains alive and well. In the context of their overall bilateral relationship the strategic significance of the territorial dispute, however, is declining amid the rise of both countries as major regional and potentially global powers. This is revealing new theaters of interaction and potential competition.

The changing nature of the Sino-Indian relationship is made evident by the contrast of the current state of bilateral relations with their state during the month-long border conflict that took place 50 years ago. Future hostilities between both countries, however, are unlikely to be confined to their disputed border. Rather, with both countries acquiring more tools and platforms of interaction, renewed hostilities will likely spill over beyond the confines of their bilateral relationship with greater repercussions for the regional and global security architecture. Amid the growing strategic importance of trade and imported resources to fuel their economies, the most likely theaters of this "spillover" are both countries' third-party relations and their growing interests in the maritime domain.

Beijing Leverages "All-Weather" Friends

The potential "spillover" is most evident in third-party relationships. Notably, China's "all-weather" relationship with Pakistan has been complemented by deepening relations with other states around India's periphery (Far Eastern Economic Review, October 2, 2009). These deepening relations have been evidenced in China emerging as a leading trade partner, source of diplomatic support and provider of military hardware to several countries in the region. More specifically, Chinese investment in several strategically important projectsranging from port projects at Gwadar in Pakistan, Hambantota in Sri Lanka, and Sonadia Island in Bangladesh, a railway link between China and Nepal as well as an oil and gas pipeline from the Burmese port of Kyaukryu to Yunnanhas raised Indian fears that these projects could facilitate Chinese encirclement (Asia Times, September 29; April 23; Xinhua, September 10, 2010).

Pakistan is a case in point. Despite growing levels of political, economic and security instability facing the country, more than 60 Chinese companies and 10,000 Chinese nationals in the country working on 122 major development projects demonstrate Beijing's commitment (Far Eastern Economic Review, October 2, 2009). Notably, China recently renewed its commitment to the Gwadar port project after the Singaporean Port Authority decided to pull out of the port management and development contract (Asia Times, August 29). Despite problems facing the project over land acquisition and security concerns, China has reassumed responsibility for the infrastructure project after financing the port's construction.

Moreover, China is now Pakistan's leading trading partner and economic integration has continued to gain momentum facilitated by their free trade agreement, the establishment of the Pakistan and China Joint Investment Company (JIC) and an agreement to settle trade across the Xinjiang Uyghur Autonomous Region border using the Chinese renminbi as the base currency instead of the U.S. dollar. China's on-going support for Pakistan's civilian and military nuclear power program also has served as veiled criticism of the civilian nuclear power agreement between India and the United States ("The China-Pakistan Reactor Deal and Asia's Nuclear Energy Race," China Brief, June 11, 2010; Times of India, June 2, 2010; May 13, 2010; Asia Times, April 21, 2010).

In Afghanistan, a nascent competition for transshipment corridors is underway with India having constructed the Delaram-Zeranj highway connecting Afghanistan with the Iranian port of Chahbahar. This provides an alternative route to the Chinese-funded Gwadar as a means for accessing the resources and markets of Central, West and South Asia (Asia Times, December 4, 2009). The value that both countries place in their relations with Afghanistan is evidenced by China's conclusion of a "strategic and cooperative partnership" with Afghanistan in June less than a year after India concluded a similar agreement in October 2011.

Burma's on-going democratic transition also makes the country a key "battleground" state in the Sino-Indian competition for resources and strategic influence. While India has so far played "second-fiddle" to China in Myanmar, New Delhi's middle-path approach of engaging both members of the former military junta regime and pro-democratic forces is likely to yield dividends as Burma comes in from the cold and re-engages the international community. The liberalization process itself appears to have been driven in part by the desire of the military-backed government to reduce the country's overwhelming reliance on China. This was made evident by the suspension of the Myitsone dam and hydroelectric power project in Kachin state in September 2011 over social and environmental concerns (The Irrawaddy, October 2).

Meanwhile, Burmese pro-democracy leader Aung San Suu Kyi's recent visit to India is evidence of a burgeoning Indo-Burmese relationship, which could come at the cost of the Sino-Burmese relationship if the country's democratic transition continues (Global Times, November 29). New Delhi has the potential to forge a special relationship by facilitating capacity building on the economic front while strengthening democratic institutions and the rule of law. This will ensure Burma's ongoing reform process remains substantive and sustainable.

Another potential "battleground" state is Sri Lanka, where internal transformation is also emerging as a catalyst for China and India to reorient their relations. Unlike Myanmar where the democratic transition offers opportunities to India to expand its influence, Sri Lanka's authoritarian consolidation has offered China the opportunity to strengthen its presence. Amid criticism of Sri Lanka's human rights record in the conduct of its military campaign against the Liberation Tigers of the Tamil Eelam (LTTE) that culminated in victory over the separatist insurgency in 2009, Colombo has turned increasingly to "non-traditional" sources of diplomatic and financial assistance. Notably, China has emerged as Sri Lanka's leading aid donor, providing preferential loans at subsidized rates and investing in strategically and symbolically important infrastructure projects, such as the Hambantota port project and the Colombo South Harbor Development Project. Beijing also was more forthcoming in providing offensive armaments to the Sri Lankan military in its campaign against the Tamil Tigers and providing crucial diplomatic support to Sri Lanka that New Delhi was unable or unwilling to provide (Sri Lanka Guardian, October 29, 2009). This has strengthened goodwill between Colombo and Beijing while souring relations with New Delhi.

Bangladesh and Nepal are not far behind in this competition. China has concluded the second-biggest investment in Bangladesh earlier this year by contributing two-thirds of the cost of a fertilizer factory in Sylhet followed by a private sector power project in Habiganj. This has been accompanied by projects aimed at helping Bangladesh emerge as a regional trade and transshipment hub, including constructing bridges and upgrading road and rail infrastructure in the country, upgrading the airport at Cox's Bazar as well as strengthening the country's commercial shipping fleet. The fact that opposition leader Khaleda Zia followed up a recent visit to China with a parallel visit to India demonstrates how the Sino-Indian relationship has seeped into Bangladeshi domestics politics (Asia Times, November 9; April 23).

Meanwhile, the transition of the Nepali Maoists from an insurgent group into a mainstream political party, Unified Communist Party of Nepal (Maoist), with growing influence has fuelled closer relations between Nepal and China. Nepal has exploited this to reduce India's traditionally dominant influence over the country, including putting pressure on India to renegotiate their unequal friendship treaty. Meanwhile, the Nepali government has reciprocated China's advances by becoming increasingly aggressive in its crackdown on Tibetan activists (Times of India, March 7, 2010).

Delhi Leverages "Strategic Pivot"

Meanwhile, India has pursued a deepening relationship with China's traditional competitors, including Japan, Vietnam and the United States. Notably, the United States has made a concerted effort to draw India into the East Asia region as a means of balancing China's expanding influence in the region. Calls by U.S. officials for India to go beyond its "Look East" policy and "Be East" alludes to U.S. attempts to embed India into the region (Business Standard, February 11, 2011). Although the Obama administration has not yet revived the more confrontational rhetoric of an "arc of democracies" that emerged under the Bush administration, it is nonetheless pursuing a similar agenda amid the ongoing multilateral-ization of the U.S. security posture in Asia. Evidence of this includes the launch of the U.S.-Japan-India trilateral dialogue in 2011 and Japan's participation in the U.S.-India Malabar joint naval exercises since 2007 (BBC, December 13, 2011).

Meanwhile, India's relations with China's key Southeast Asian rival, Vietnam continue to deepen. India has been conducting joint naval exercises with Vietnam since 2000 and Vietnam has granted Indian Navy vessels permanent berthing rights at Na Thrang port, which has extended New Delhi's "sustainable maritime presence" in the South China Sea (Times of India, Octobbber 8, 2011). Reportedly, India also has offered Vietnam its indigenously-developed Brahmos supersonic cruise missile and training in underwater warfare to support Vietnam's expanding fleet of submarines (Asia Times, March 29; August 17, 2011). India also is emerging as an increasingly prominent player in Vietnam's energy sector with Indian state-owned company ONGC Videsh jointly exploring in disputed waters (Outlook India, August 3). The fact that India's deepening maritime and energy cooperation with Vietnam coincides with renewed tensions between China and Vietnam over their maritime territorial disputes in the South China Sea signals Sino-Indian competitiveness could "spill over" into Southeast Asia.

Finally, the rapprochement in India-Japan relations has coincided with a deterioration in the Sino-Japanese relationship. To be sure, Indo-Japanese economic interactions remain weak with $14 billion in bilateral trade in 2011 and a target of $25 billion by 2014. This pales in comparison to Japan's trade with China that was close to $345 billion in 2011 (Economic Times, May 20; JETRO, February 23). Nonetheless, despite starting from a low base Indo-Japan relations have continued to grow from strength to strength in the economic and strategic domains. India has been the leading recipient of Japanese overseas development assistance (ODA) since 2003 while in 2006 both countries forged a "strategic and global partnership," which has been complemented by a bilateral strategic dialogue since 2007, a free trade agreement in 2011 and bilateral naval exercises in June (Press Trust of India, June 4; Business Standard, February 22, 2011; Mofa.go.jp, December 2006).

Moving into the Maritime Domain

Beyond both countries' engagement with third parties, the most likely platform of "spillover" in the Sino-Indian relationship is the maritime domain, which has gained strategic importance amid their rise as major trading and resource-consuming powers. This in turn has transformed the nature of their bilateral relationship from a land-based rivalry toward a competition increasingly taking place in the maritime domain. This is rooted in the fact that more than 95 percent of India's exports are seaborne compared to 60 percent of China's exports while 70 percent of Indian hydrocarbons emanate from offshore blocks and 80 percent of China's oil imports transit the sea lanes of the South China Sea and Indian Ocean [1].

Both countries traditionally have pursued relatively modest maritime security interests confined to playing a supporting role to land-based operations and protecting their respective coastlines. China's focus has been on sea-denial capabilities aimed at deterring U.S. intervention in a conflict in the Taiwan Strait while India has focused on coastal defense and surveillance given the country's porous, poorly-demarcated and disputed maritime border. Both countries' are now pursuing increasingly ambitious naval doctrines, reflecting the need to protect their expanding overseas interests. For instance, Chinese maritime strategists have espoused moving beyond "near-coast defense" toward "near-seas active defense" and increasingly into the realm of "far-sea operations" [2].

China's pursuit of "new historic missions" that entail increasing overseas deployments coincide with the Indian Navy's ambitions to transform itself into "a brand new multi-dimensional navy" with "reach and sustainability" (Times of India, December 21, 2011). This will bring both countries' navies into closer contact and ensure that they cross paths more frequently. This was demonstrated in July 2011 when an Indian Navy vessel, the INS Airavat allegedly received radio contact from the Chinese Navy demanding the vessel depart disputed waters in the South China Sea after completing a port call in Vietnam (Times of India, September 2, 2011). Similarly, the 2009 deployment of a People's Liberation Army Navy (PLAN) naval taskforce to the Indian Ocean has brought China's navy into closer contact with India's strategic backyard (BBC, December 13, 2011). The fact that China and India are two of only six countries with a nuclear submarine capability and two of only ten countries with aircraft carriers points toward a growing interest by both countries to project power beyond their littoral regions.

Constructive Competition

To be sure, competition between China and India is by no means a certainty nor necessarily and a cause for concern. For instance, third-party countries benefit from Sino-Indian competition through improved infrastructure and greater access to aid and investment. If this competition grows fiercer, however, it may drive Beijing and New Delhi to provide more aid to local elites with fewer strings attached at the expense of good governance.

In the maritime domain, given both countries' mutual dependence on trade and imported resources to fuel their economies, they share an interest in protecting sea lines of communication and maintaining freedom of navigation. This potential for cooperation has been demonstrated by China and India coordinating their anti-piracy patrols in the Indian Ocean within the framework of the Shared Awareness and Deconfliction mechanism (Times of India, February 2). India has so far outpaced the PLAN in the sphere of protecting the maritime commons'. This was demonstrated by the Indian Navy's assistance following the Asian tsunami in 2004, the cyclone that struck Myanmar in 2008 and the evacuation of Indian, Sri Lankan and Nepalese civilians from the conflict in Lebanon in 2006 (Financial Times, February 17, 2010; Times of India, January 7, 2005).

China is fast catching up in its humanitarian response capabilities as demonstrated by the PLA Navy escorting non-Chinese vessels, including UN World Food Program convoys, through the Gulf of Aden as well as the deployment of a Chinese missile frigate to the Mediterranean Sea in early 2011 to support the evacuation of Chinese nationals from Libya. China's rhetoric of maintaining "Harmonious Seas" and engaging in military operations other than war (MOOTW) suggest that Beijing's potential for cooperation in the maritime domain could grow as its maritime security interests move farther from its coastline (South China Morning Post, March 30, 2011; February 26, 2011; China Daily, November 27, 2010; "PLAN Shapes International Perception of Evolving Capabilities," China Brief, February 4, 2010).

Conclusion

Fifty years on, another war between China and India remains an unlikely prospect. Conflict has been constrained by the fact that their bilateral frictions have been largely strategic rather than ideological. The bilateral relationship lacks the historical animosity seen in the Sino-Japanese or Sino-Vietnamese relationship (Pragati, January 6).

Nonetheless, both countries face an increasingly complex and multi-layered relationship amid their growing international diplomat, economic and military clout. The Sino-Indian relationship is more nuanced than the U.S.-Soviet rivalry of the Cold War, interspersed with cooperation, competition and a latent rivalry. On the one hand, a climate of mistrust permeates the bilateral relationship rooted in their unresolved territorial dispute, economic imbalance and resource competition, because of deficient institutional mechanisms for interaction. Both countries, however, see eye-to-eye on a number of global issues ranging from climate change to poverty reduction and relations with pariah regimes, such as Iran, Sudan and, until recently, Burma.

Fuelled by a demographic dividend and both countries' growing overseas interests and capabilities, the Sino-Indian relationship is likely to be among the most potent sources of rivalry between major powers in the 21st century. As both states acquire the capabilities and ambitions to reshape the international system, the relationship is likely to play out on the world stage.

Deterring renewed Sino-Indian hostilities will require both countries to acknowledge the changing nature of their bilateral relationship amid their rise as major powers. This will entail devoting more resources to manage the potential "spillover" of their bilateral relationship into other arenas, including third-party relations and the maritime domain, through more institutionalized forms of interaction. Ultimately, maintaining a cordial bilateral relationship will ensure the continuation of both countries' growth and a stable global ecology than unrestrained competition.